Energy Dept to streamline export review for Alaska LNG

U.S. Energy Secretary Ernest Moniz told business leaders in Anchorage that the Department of Energy will streamline the federal LNG export license application process for Alaska’s North Slope gas project.

That’s good news, U.S. Sen. Mark Begich said, because it means that the public interest test for the Alaska project won’t get bogged down in controversy as has happened in the Lower 48, where business and community groups worry about the price effects of domestic gas being exported as LNG.

Begich was with Moniz at the meeting with stakeholders hosted at Cook Inlet Region Inc. in Anchorage, which was closed-door, and at a following press conference.

A consortium of the three major North Slope producers, TransCanada Corp. and the State of Alaska filed an application July 18 for a project to export up to 20 million tons per year of LNG from Alaska.

“We want to be very explicit to say that we will treat Alaska differently. The public interest is not an issue for us,” Moniz said at the press conference.

That’s because the export of Alaska’s gas will not affect markets in the continental U.S. A public interest determination will still be done but it will be largely a formality.

In another development, DOE has exempted the Alaska project from a new U.S. Department of Energy rule that LNG export projects complete their environmental reviews before a federal LNG export licenses is issued.

The rule, published June 4 and made effective Aug. 15, ends DOE’s practice of issuing of conditional licenses for continental U.S. LNG export projects and also its practice of processing applications in the order they were filed, Moniz said.

“There will no longer be a ‘queue’ for applications,” he said. Those will be processed when applicants complete national environmental impact statement, or EIS, typically with the Federal Energy Regulatory Commission.

Alaska, however, is again to handled separately, Monitz said. A “conditional” export license for Alaska will be granted when the project moves further along in its development.

Lower 48 LNG export projects previously were able to get conditional approvals but no longer, under the new rule. Alaska will still be able to get one, however. That will aid Alaska in efforts to market LNG in Asia, which are beginning this year.

“The Alaska project has been in a gestation stage for a long while,” Moniz said, and DOE feels it important to get huge stranded gas reserves on the North Slope onto world markets. “This is a private sector project and we want to do all we can to facilitate it, and not be seen as an obstacle.”

Moniz said completion of the National Environmental Policy Act process, which includes the EIS, will still be required for a final Alaska export license, however.

Larry Persily, federal natural gas coordinator for Alaska, said that the requirement for completion of the NEPA review, had it been applied to the Alaska project, it would likely have slowed the project and added costs, now estimated at $45 billion to $65 billion.

Persily said the knowledge that DOE is treating Alaska in a streamlined manner and allowing a conditional export license will help the marketing efforts.

Moniz said in an interview that the Lower 48 queue and conditional permit process had become cumbersome for both DOE and applicants alike and in some ways a hindrance because an applicant’s position in the lineup had little relationship to its actual chance of success in clearing environmental reviews, permitting and financing hurdles.

DOE now intends to process applications in the order that they complete the NEPA process, he said.

In other comments, Moniz said DOE is moving to strengthen its efforts to aid renewable energy projects in Alaska, mainly through its loan programs. The agency will continue to seek partnerships with entities in the state on geothermal and wind-diesel integration projects, he said.

The agency is interested in Alaska as a demonstration test-lab for advanced control systems to increase the efficiency of power generation when wind and diesel are combined in a small grid, Moniz said.

These are technologies that, once demonstrated in remote settings in Alaska, could be exported internationally to places like Africa, where they are multitudes of small villages isolated from large power grids.